During the formation of the A-share market's survival-of-the-fittest mechanism,problematic companies are being "voted with their feet" by investors,leading to an increasing proportion of delisting due to par value.Data indicates that 13 listed companies have been determined to delist within the year,with 7 of them delisting due to touching the par value,accounting for more than 50%.

Due to the "magnetic effect" of the capital market,the closer the price is to 1 yuan,the higher the likelihood of delisting due to par value,hence the lower-priced stocks are continuously sold.This negative cycle has resulted in the emergence of 9 stocks with a market value of over 10 billion yuan,each with a share price around 1 yuan.Among them,several companies are currently operating normally and are profitable,causing market concerns that the new delisting rules may cause "collateral damage," with companies that should not delist being "forced" to delist due to par value.

The expansion of the low-priced stock lineup,with 9 stocks valued at over 10 billion yuan trading below 1.5 yuan

The proportion of low-priced stocks is currently at a high for this year.Wind data shows that as of the close on June 27th,the number of A-shares with a closing price less than 1 yuan reached 46,accounting for 0.36%,which is at a high since 2018.

Comparing the figures from the first few months of this year,the number of low-priced stocks has been on an increasing trend.As of the close on April 1st,there were only 2 companies with a closing price below 1 yuan.After the close on May 1st and June 1st,the numbers were 10 and 26,respectively.

A private equity person in Shanghai analyzed to the First Financial Daily reporter that the continuous increase in the number of low-priced stocks in recent months is due to multiple factors."Firstly,the delisting system has been effectively implemented,and during the formation of the market's survival-of-the-fittest mechanism,companies with poor fundamentals and operating conditions will be continuously sold by capital,accelerating the clearance of 'problem stocks.'" The aforementioned private equity person said,"Secondly,over the past month,the market has been in an adjustment phase,and investment sentiment has been relatively low,making low-priced stocks more susceptible to capital selling."

Most of the listed companies with stock prices below 1 yuan have been "ST" for various reasons,while some of the billion-dollar companies with stock prices close to 1 yuan and no significant negative impacts on their operating performance have attracted widespread market attention regarding the risk of delisting due to par value.

As of the close on June 27th,there were 109 stocks in the two markets with a closing price of less than or equal to 1.5 yuan,including 9 companies with a market value of over 10 billion yuan.These are: Beijing Jinyu Group (601992.SH),Baotou Steel (600010.SH),Greenland Holdings (600606.SH),Shanzi High-tech (000981.SZ),ST E-Commerce (002024.SZ,Suning.com),Liaoning Port (601880.SH),Shandong Steel (600022.SH),Yongtai Energy (600157.SH),and Hainan Airlines (600221.SH).The average decline for these 9 stocks since June has been 17.1%,with Greenland Holdings and Beijing Jinyu Group both experiencing declines of over 20%,significantly underperforming the main stock indices and their respective sectors.

The company with the highest total market value is Baotou Steel,at 63.1 billion yuan,followed by Hainan Airlines,at 47.1 billion yuan.Hainan Airlines turned a profit in the first quarter of this year,with a year-on-year increase in net profit attributable to the parent company of 334.51%,reaching 686 million yuan.However,the company's closing price on June 27th was reported at 1.09 yuan,posing the highest risk of delisting due to par value.

In terms of continuous profitability and operating performance,Suning.com has been ST due to consecutive years of performance losses,and the devaluation of its stock is understandable.However,the situations of Yongtai Energy and Liaoning Port are different.Since the second quarter,Yongtai Energy and Liaoning Port have cumulatively declined by 9.77% and 12.14%,respectively,with the latest closing prices at 1.2 yuan and 1.23 yuan.There is no indication from the fundamentals that these two companies face negative impacts on their continuous profitability and operational management.Financial reports indicate that Yongtai Energy,primarily engaged in coal and electricity,has seen its net profit attributable to the parent company amount to 1.06 billion yuan,1.909 billion yuan,and 2.266 billion yuan for the years 2021 to 2023,respectively,showing an overall pleasing growth in performance.In the first quarter of this year,affected by the low domestic coal prices,the company's revenue and net profit attributable to the parent company decreased by 10.07% and 27.29% quarter-on-quarter,respectively.

Liaoning Port Co.,Ltd.,mainly engaged in the transshipment of liquid chemical products,has never experienced an annual loss since its listing in 2010.In the first quarter of 2024,the company achieved a revenue and net profit attributable to the parent company of 2.888 billion yuan and 372 million yuan,respectively; the net profit attributable to the parent company for the years 2021 to 2023 was 1.916 billion yuan,1.28 billion yuan,and 1.343 billion yuan,respectively.Although there has been a certain decline,the company still maintains its continuous profitability.

Low-priced stocks are accelerating their decline,and who is mistakenly affected by the face value delisting?

Wind data shows that since May,the average decline in the A-share market has been 10.11%.A further comparison reveals that stocks with prices above 10 yuan have an average decline of 7.07%; stocks with prices above 2 yuan and up to 10 yuan have an average decline of 11.58%; stocks with prices below 2 yuan and above or equal to 1.5 yuan have seen an average decline of 24.84%; stocks with prices below 1.5 yuan have an average decline of 34.15%.

The data above reflects that in the recent phase,the lower the price of the stock,the faster the rate of decline.In conjunction with the aforementioned situation where the stock price of companies with a market value of over ten billion yuan is approaching 1 yuan,a batch of low-priced stocks that have not been ST (Special Treatment) are also accelerating their decline.

Shandong Steel is a typical example.On June 6th,the stock price of Shandong Steel fell to a low of 1.12 yuan during the trading day,and as the 1 yuan mark was about to be breached,the controlling shareholder "promptly" increased its shareholding.On the evening of the 26th,the company announced that the controlling shareholder,Shandong Steel Group Co.,Ltd.(hereinafter referred to as "Shandong Steel Group"),had increased its shareholding by 1%.As of June 26th,Shandong Steel Group had cumulatively increased its shareholding in the company by 110 million shares,with an increase amount of 133 million yuan.The increase amount range for this round is from 500 million yuan to 1 billion yuan,and it has not been fully implemented yet.As of the closing on the 27th,the stock price of Shandong Steel was reported at 1.23 yuan.

The Shanghai Stock Exchange and Shenzhen Stock Exchange have regulations on face value delisting: if the closing price of a stock is below 1 yuan for 20 consecutive trading days,the stock will be decided to be terminated from listing.

It cannot be denied that some companies used to have high bonus issues in previous years,and such "not cherishing share capital" would not have faced the embarrassment of breaking below 1 yuan before the new delisting rules,but now it is a different situation.

Taking Shandong Steel as an example,in 2006 and 2007,the company consecutively carried out a 10-for-10 stock bonus for two years,and in 2009 and 2017,it carried out a 10-for-8 stock bonus and a 10-for-3 stock bonus,respectively.After a series of stock bonuses,Shandong Steel now has a total share capital of 10.7 billion shares,and even if it falls to 1 yuan,it still has a market value of over ten billion yuan.

As for the system itself,the aforementioned private equity person told the reporter that the face value delisting in the new delisting rules can still be further improved,and it may be possible to refer to the regulations on face value delisting in overseas markets."The NASDAQ exchange stipulates that if the stock of a listed company closes below 1 US dollar for 30 consecutive trading days,the NASDAQ exchange will issue a delisting warning to the company.The company has 180 days after receiving the warning to rectify and meet the requirements.If during the rectification period,the company's stock price can be maintained above 1 US dollar for at least 10 consecutive days,it will be considered to have met the rectification standards." The aforementioned private equity person said: "Currently,there is no rectification period for listed companies in the A-share face value delisting rules.For listed companies that are normally operating,continuously profitable,and have no financial fraud,if they are ultimately delisted due to a large share capital and low stock price,it is somewhat regrettable."